July 28th, 2008 7:38 AM by Lehel Szucs
Friday's bond market has opened in well in negative territory as traders erase a sizable rally in bonds yesterday. The stock markets are in positive territory after their large sell-off yesterday helped fuel the bond rally. The Dow is currently up 51 points while the Nasdaq has gained 17 points. The bond market is currently down 16/32, which will erase yesterday's late rally and prevent much of an improvement in this morning's mortgage rates.
None of today's economic news did anything to help bond prices or mortgage rates. The first was June's Durable Goods Orders that showed an increase in orders for big-ticket items of 0.8%. This was much larger than the small decline that forecasted, indicating that the manufacturing sector may be stabilizing.
The second report was the revision to July's University of Michigan Index of Consumer Sentiment. It showed a reading of 61.2 that was well above the earlier reading of 56.6. This means that consumers w ere much confident about their own financial situations than many had thought. That is considered bad news for bonds because higher levels of confidence usually means that consumers are more willing to make large purchases, helping to fuel consumer spending.
The third was June's New Home Sales report, but it was the least important of the three. It showed a much higher level of sales than was expected and revealed an upward revision to May's sales numbers. Fortunately, this data is not considered to be of high importance or we may have seen bonds even lower than current levels.
With exception to Monday, next week is packed with relevant economic reports. Included in the long list of reports scheduled for release is the single most important quarterly report and the arguably the most important month report. In addition, there are several other pieces of data that may influence the markets and mortgage rates next week. Look for more details on next week's events in Sunday's weekly preview.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2008